WORLD TRADE  
ORGANIZATION  G/C/W/522 
30 June 2005 
 (05-2831) 
Council for Trade in Goods Original:   English 
  
 
ISSUES RELATED TO TRADE IN TEXTILES AND CLOTHING 
 
The Perspective of Turkey on the Issues Involved
 
 
 
 The following communication, dated 28 June 2005,  is being circulated at the request of the 
Delegation of Turkey.  
_______________ 
  
1. In 2003, world textile and clothing exports accounted for US $ 359 billion, nearly 6 per cent 
of total world merchandise exports.  Developing countries took a share of nearly 60 per cent, reaching a level of US $ 208 billion.  At present, for a good number of the developing countries, the textile and 
clothing sector is the main source of export revenues, accounting in some instances as high as 90 per cent of manufactures.   The EU, the US and Japan which account for some 80 per cent of world 
imports of textile and clothing are the main des tinations of many devel oping countries' exports. 
 2. Actually, the textile and clothing sector pl ays essential role in the economic and social 
development of many countries.  In this resp ect, the developing countries' expectations from 
1 January 2005 were at very high levels.  In this  context, it was expected that while MFA phase-out 
would increase global welfare, the world trade of textile and clothing and developing countries as a 
whole would further gain market share in world to tal exports.  Moreover, textile and clothing trade 
was expected to greatly expand during the transiti on period and create at least 20 million new jobs in 
developing countries.   3. Today, the situation is extremely different and getting even more complicated.  The dramatic 
transformation of global production a nd sourcing patterns in this sector  are a great source of concern 
for the developing countries.  The current situati on of many of these countries, relying heavily on 
textile and clothing sectors, exacerbates their vulne rability to the sharp consolidation of production 
into a few suppliers.   
4. In fact, the disruptive effects of the remova l of textile quotas are beginning to be felt by 
textile industries in developing countries around the world.  Information on developments of major 
export markets confirm that a great many of te xtiles and apparel exporting countries, including 
Turkey, have been facing the risk of being swep t away from their traditional export markets.   
 
5. As a matter of fact, China's textile and appa rel exports to the EU have increased 73 per cent 
year-on-year and, more than 500 per cent for some categories such as sweaters and sweatshirts as well 
as linen fabric and above ten times for women' s pantyhose and tights since 1 January 2005.  
 
6. The US market, which absorbs the lion's sh are of the world textile and apparel imports 
together with the EU, is another instance of such development.  Actually, China's sales to the US 
surged 65 per cent year-on-year.  In some cate gories the increase of Chinese products soared as high 
as 15 times in the first quarter of 2005 over 2004 levels. G/C/W/522 
Page 2  
 
  
7. According to some estimates, China's share of the EU market is expected to rise to over one 
third.  The respective figure is approximately 50 pe r cent for the US market.  This situation would 
come at the expense of other developing countries.  As a result, China, already holding about one fifth 
of the global market in this sector, might have  a 150 per cent increase in its overall textile and 
clothing exports or nearly 50 per cent of the world marketing in a very short span of time.  
 8. Moreover, combined with sudden surge in im ports from China the sharp declines in prices 
have been experienced in the first quarter of 2005.  The volume of t-shirt imports originating from China has risen by 187 per cent and the prices have  decreased by 36 per cent in the EU market. 
 
9. Significant drops of average unit prices that have triggered massive increases in exports of 
some countries are inevitably result in market disrup tions.  According to UN statistics, Chinese prices 
for major clothing products are 58 per cent below av erage world prices.  Although export taxes could 
discourage price declines to a great extend, the impact  of the measures taken by China in this regard, 
is negligible.  On the other hand, as it is rightly  pointed out in papers from various Members, the 
impact of the dismantling of the textile and appa rel quotas can be seen in the toughening competition 
among developing and the least deve loped countries.  Most countries have engaged in an aggressive 
competition strategy to be able to remain competitive and maintain their market shares.  As a result of 
this, declines in price of textile and clothing have been accelerated.  Should price declines continue, it 
would result in a further deterioration in developing  countries' terms of trade.   This situation poses 
great challenges in terms of sustainable devel opment and on the conditions for fair competition. 
 10. In fact, the potential disruption of textile ma rkets is also recognized in the protocol on the 
accession of China to the WTO, taking into acco unt the very important production and export 
potential of China in textile and clothing.  The m easures taken by some countries in this regard are 
highly remarkable.  However we ha ve concerns about the adequacy  of such initiatives to ensure 
smooth transition.  11. The elimination of quantitative restrictions has already brought major adjustment challenges 
for many developing and the least developed countries.  These countries have to adjust many elements 
of the supply chain (i.e. from cotton producers to re tailers) at very high costs.  For this purpose, 
governments should devise a cohere nt textile and clothing policy framework for structural 
adjustments to remain competitive.  This re quires governments to assess and improve their policy 
framework.  Within this context, technical and fina ncial assistance are needed in order to improve 
competitiveness and to create alternative employment opportunities.  
12. Moreover, the complexity of the challenges that many developing countries are facing today 
requires policy coherence at the global level.  It w ould merely become more difficult to resolve these 
problems unless appropriate remedies are developed collectively.   13. It is clear that the WTO is the main responsib le body to solve problems of textile and clothing 
sectors arising from the conduct of trade relations among its members in matters related to the WTO 
agreements and other associated legal instruments.  In fact, part IV of GATT 1994 contains precise 
and specific obligations to find satisfactory solutio ns to the difficulties faced by many developing 
countries.  However, other international institutions  have also responsibility to address the challenges 
and priority needs of developing countries in trade and development.  
14. Based on the aforementioned considerations, establishment of a WTO work programme is 
deemed indispensable to handle the challenges and in itiate an action to maintain undisrupted markets 
and create new opportunities.     G/C/W/522 
 Page 3 
 
 
 15.  In this respect, the following proposals are made: 
 
• The Council for Trade in Goods (CTG) should establish a “work programme” for a full and 
periodic review of global textile and apparel production, export and market circumstances so 
as to develop appropriate remedies within the multila teral trade system.  It is also important to 
closely monitor developments with a view to  avoiding any deterioration in the trading 
conditions of the world te xtile and clothing sector.  
 
• The CTG Chair, considering the various aspects of the sector, should periodically consult 
with the chairpersons of the Special Sessi ons Agriculture Committee and the Negotiating 
Groups on Market Access and Rules to address the issues relating to trade in textile and 
clothing products to ensure comprehens ive and exhaustive study of the sector.  
 
• Taking into account the fact that trade policy measures in textile and clothing sectors have a 
major impact on production and investment, as well as trade flows, the WTO Secretariat 
should examine the adjustment-related issu es and make recommendations on measures in 
order to assist developing and least developed countries experiencing challenges in the short 
and medium term as a result of the expiration of the ATC.  In this context, the identification 
of possible ways to stabilize prices merits special attention.  
 
• The Committee on Trade and Development should also work on the problems created by 
declines in the prices of these products in the s hort run in cooperation with other relevant 
international organizations and report on the results of its works to the CTG.  
 
• The WTO should examine the ways to develo p collaborative efforts with the relevant 
international organizations, including World Ba nk, IMF in order to effectively direct 
resources under existing programmes toward dive rsification of economies relying heavily on 
textile sector. 
 
__________